Losing your job does not mean you have to lose your health care insurance. The Consolidated Omnibus Budget Reconciliation Act requires that certain employers and insurance companies allow you to continue your group health care insurance coverage after termination.
When COBRA requirements are met, you can choose to pay both the employer and employee portions of the group premium in order to maintain existing health care coverage for you and your dependents.
Basic Rights Under COBRA
COBRA applies to employers with 20 or more employees and an existing group health care plan. They must give departing employees - full, reduced, or part-time - the option of continuing their health insurance under the group plan rate.
COBRA gives you and your dependents 18 months of basic coverage while you look for a new job. Coverage expands to three years in some situations. The COBRA medical coverage must be the same coverage as you had when you were employed.
COBRA Coverage Eligibility
COBRA covers employees who quit their jobs or retire, as well as employees who have been fired for anything other than particularly bad conduct. It also covers spouses, former spouses, and dependent children, as long as they were part of your coverage on the day before you become eligible for COBRA. A child born or adopted during COBRA coverage is also covered.
Qualifying for COBRA Coverage
You are qualified to choose COBRA coverage as soon as the day after a "qualifying event." A qualifying event is the event that caused you to lose health insurance coverage, such as being fired, being dropped to part time, accepting retirement, or quitting your job.
Following the Right Procedure
COBRA requires employers and employees to follow a particular procedure to guarantee coverage. Employers must notify their health insurance plan administrator within 30 days of an employee's last full time day on the job.
Plan administrators have 14 days to notify the former employee of his right to choose COBRA coverage. The former employee then has 60 days to decide whether to continue coverage with COBRA and another 45 days to pay the first premium.
COBRA Benefits Can Expire or Terminate
When you choose COBRA, you must pay both the employer and employee portions of the health insurance premium by sending your employer or former-employer a check every month. Your health coverage will end automatically if you do not send in your premium check on time. Otherwise, your COBRA insurance will end on the last day of your eligibility period.
An Employment Lawyer Can Help
The law surrounding continuation of health insurance is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact an employment lawyer.